A procedure to successfully tether iron oxide nanoparticles to Single Wall Carbon Nanotubes (SWNTs) in a water solution containing a sodium dodecylbenzenesulfonate surfactant was developed. Through the application of a magnetic field, the SWNTs with tethered Fe2O3 particles could then be stretched and aligned in a parallel configuration within the fluid. The experimental results indicated that aligning the magnetically sensitive nanoparticle (Fe2O3) attached SWNTs in a polymer matrix under a magnetic field, may substantially improve the physical and mechanical properties of the composites. In this investigation, the mechanical and thermal properties of SWNTs/epoxy composites were investigated to determine the potential impact of the SWNT alignment. Neat epoxy composites were produced to serve as a baseline and the results compared with composites loaded with magnetically sensitive SWNTs with weight percentages of 1 wt% and 2 wt%, both with and without magnetic field alignment. The results indicate that the alignment has a significant effect on the mechanical properties, with 1 wt% loaded composites under a magnetic field exhibiting a 9.8% enhancement in tensile strength compared to 1 wt% loaded composites in the absence of the magnetic field. Similarly, 2 wt% loaded composites under a magnetic field demonstrated a 9.7% enhancement in tensile strength compared to 2 wt% loaded composites without the magnetic field. The thermal conductivity of 0.1 wt %, 0.2 wt %, 0.3 wt%, 0.4 wt% and 0.5 wt% loaded composites under a magnetic field were also evaluated and indicated a 35% increase over the baseline values. As a result, this new alignment methodology may provide significant opportunities by which varying tensile strength and thermal conductivity can be used in both research and industrial applications.